Goldman Sachs leads new funding round in budget stays aggregator FabHotels

Goldman Sachs leads new funding round in budget stays aggregator FabHotels
Photo Credit: Photo Credit: Pixabay

Gurugram-based Casa2 Stays Pvt. Ltd, which owns and operates budget hotel aggregator FabHotels, has received $7.86 million (Rs 54.3 crore at current exchange rate) in a fresh tranche of funding.

According to the company’s filings with the Registrar of Companies, existing backer Goldman Sachs has led the tranche with a $5.04 million (Rs 34.8 crore) infusion.

Existing backers Accel and Qualcomm Ventures accounted for the rest. The company raised this sum late last month by issuing Series B class of compulsorily convertible preferential shares.

The company raised this tranche at a $900-910 million (Rs 6,221-6,290 crore) valuation, by TechCircle estimates.

TechCircle could not ascertain if the infusion was part of the $25 million Series B round the firm had announced in July 2017 involving Goldman, Accel and Qualcomm.

E-mail queries to Vaibhav Aggarwal and Adarsh Manpuria, co-founders of FabHotels, did not get a response till press time.

The Financial Express, citing a spokesperson, said that the funding was part of the announced 2017 Series B round.

The filings also revealed that FabHotels may also be looking to raise at least another $15 million as part of a fresh funding round from a new investor.

FabHotels was founded in 2014. Aggarwal had previously co-founded Rocket Internet-backed online furniture e-tailer FabFurnish. He also had stints at Groupon and Bain & Company. Manpuria had served as venture development associate at Rocket Internet Ventures and had closely worked with many of its portfolio companies, including FabFurnish, Foodpanda and Jabong.

FabHotels works on an asset-light model, where it uses the technology platform to promote its partner hotels with capacities of 20-40 rooms, and provides standardised services to budget travellers. It also operates a professional training academy for the hotel staff and quality control teams.

FabHotels operates over 500 hotels across more than 40 major Indian regions, including Mumbai, Delhi-NCR, and Bengaluru.

Players like FabHotels are currently facing stiff competition from deep-pocketed and better-established players like OYO, MakeMyTrip and Yatra, which are seen as the current market leaders in the hotel-accommodation space. Besides, global players like Airbnb, Booking.com and Agoda have also set up shop in India and are looking to expand their operations through strategic investments or tie-ups.

Last month, media reports stated that Treebo Hotels, another well-funded player in the space, was in advanced talks to raise up to $40 million from French hospitality chain Accor SA in a fresh round of funding.

There were also speculation of a possible consolidation between Treebo and FabHotels.

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